Planet 13, a prominent cannabis dispensary in Las Vegas, recently made headlines with its acquisition of rival dispensary Exhale. The move, valued at $6.9 million, has been hailed as a significant step forward for the Las Vegas cannabis industry. With the acquisition, Planet 13 is expanding its presence in the city, further solidifying its position as a key player in the competitive market.
The transaction, which was announced on Wednesday, is pending approval from the Nevada Cannabis Compliance Board (CCB) and the transfer of the business license by Clark County. The sale price includes $4 million for the business itself and an additional $2.9 million for the cannabis inventory. This acquisition marks a strategic decision by Planet 13 to enhance its operations and strengthen its market position in Nevada.
According to a CCB spokeswoman, transfers of ownership interest in cannabis dispensaries are routine procedures for the board and typically take three to six months to complete. The agency has approved nine ownership changes between June and August alone, highlighting the dynamic nature of the industry. The CCB’s investigation process mirrors the rigorous licensing investigations conducted by the Gaming Control Board, ensuring compliance and accountability in the sector.
While the CCB does not disclose specific sale prices of dispensaries due to the private nature of ownership groups, Planet 13, as a publicly traded company, disclosed the acquisition cost as it was deemed material to earnings under Securities and Exchange Commission guidelines. This transparency reflects the company’s commitment to accountability and openness in its business dealings.
Exhale, the dispensary being acquired by Planet 13, is situated on West Flamingo Road near the resort corridor, offering a prime location for attracting customers. The 3,100-square-foot dispensary features a drive-through pick-up window, providing convenience for patrons. Despite not having a consumption lounge, Exhale’s strategic positioning makes it a valuable addition to Planet 13’s portfolio.
Bob Groesbeck, co-CEO of Planet 13, expressed enthusiasm about the acquisition, stating, “Increasing our scale, operating leverage, and verticality in Nevada is one of the most cost-efficient levers for profitable growth we have, and this dispensary couldn’t be a better fit for our portfolio.” The synergies between the two dispensaries are expected to drive growth and enhance customer experience in the competitive Las Vegas market.
With Planet 13’s flagship facility spanning 120,000 square feet in an industrial area near the Strip, the company has established itself as a premier destination for cannabis enthusiasts. In addition to the dispensary, the facility features the Dazed! consumption lounge, a non-cannabis restaurant, retail outlets, and entertainment options, offering a comprehensive experience for visitors.
Christopher LaPorte, managing partner of RESET, a cannabis consulting firm, commented on the acquisition, stating, “Commanding both the north and south sides of the Vegas Strip and having two locations with proximity to the casino corridor is very smart for capturing tourist traffic.” The strategic positioning of Planet 13’s dispensaries reflects a keen understanding of consumer behavior and market dynamics in Las Vegas.
Colin Ferrian, portfolio manager at Poseidon Investment Management, highlighted the value of cannabis licenses in emerging markets like Florida and Illinois compared to established markets such as California, Colorado, and Oregon. The dynamic nature of the cannabis industry presents opportunities for growth and expansion, with Nevada emerging as a key player in the recreational marijuana sector.
Nevada voters approved the recreational use of marijuana in 2016, leading to a surge in dispensaries throughout the state. With over 100 retail cannabis stores operating in Nevada, the industry has experienced significant growth and demand. In the 2024 fiscal year, adult-use marijuana dispensaries reported over $829 million in taxable sales, underscoring the economic impact of the cannabis sector in the state.
The legalization of cannabis consumption lounges in Nevada through AB341 in 2021 marked a significant milestone for the industry. The state’s first lounges opened earlier this year in Las Vegas after meeting stringent regulatory requirements set by the CCB. These lounges provide a social and recreational space for cannabis enthusiasts, enhancing the overall experience for consumers.
Planet 13’s strategic expansion in Nevada, with a second dispensary on Sunset Road, reflects the company’s commitment to growth and market penetration. Groesbeck emphasized the importance of additional dispensaries in Nevada as a business opportunity to expand market reach and share fixed expenses across multiple locations. The company’s parent company, Planet 13 Holdings, is publicly traded and operates dispensaries in California, Illinois, and plans to expand to Florida.
In conclusion, Planet 13’s acquisition of Exhale signifies a significant development in the Las Vegas cannabis industry, demonstrating the company’s strategic vision and commitment to growth. With the approval process underway and plans for further expansion, Planet 13 is poised to solidify its position as a leading player in the competitive market. As the cannabis sector continues to evolve, opportunities for growth and innovation abound, positioning Nevada as a key hub for the burgeoning industry.